WASHINGTON, D.C.—As hotel owners and operators continue to grapple with elevated labor costs, staffing shortages and pressure on profitability, industry leaders at the Destination AI conference last week in believe artificial intelligence may offer one of the clearest paths to improving operational performance.
AI is poised to reshape everything from labor management and engineering operations to revenue management and guest-facing roles, according to Alex Cabanas, executive chairman of Pyramid Global Hospitality; Keryn McNamara, chief information officer at Aimbridge Hospitality; Matt Schwartz, chief technology officer at Sage Hospitality Group; Andrew Arthurs, president and COO of Actabl; and Will Gilbert, co-founder of Bodhi.
Cabanas pointed to industry headwinds that continue to challenge hotel operators, including lingering labor shortages, increased operating costs and pressures on profitability. "Labor and expenses have reset to a much higher cost," he said, noting that gross operating profit remains below pre-pandemic levels for many hotels.
Despite those challenges, panelists expressed optimism that AI can help operators do more with existing resources.
While panelists differed on exactly where the industry stands in its AI journey, most agreed that hospitality is still in the early stages of adoption. "We're not known as an industry that changes well," said McNamara. "I think we're on the precipice of immense change."
According to Arthurs, owners and operators may be underestimating how quickly competitive advantages can accumulate for organizations that move early.
"Those that are embracing AI and moving quickly, there is a real advantage to moving early," he said, noting that organizations that learn and adapt faster can create a "virtuous cycle" of improved outcomes.
The Biggest Opportunity
Throughout the discussion, labor emerged as the operational area where AI is delivering some of the most immediate value.
For Aimbridge Hospitality, labor optimization became a key focus because labor represents the company's largest operating expense. McNamara said the company chose to build its own AI-powered labor forecasting platform, called Lyft, after determining it had the scale, data and expertise to develop the tool internally.
"We have the data across the 800-plus global hotels that we run," she said. "We have the capabilities, we have the skill sets, and we can leverage AI."
Building the solution internally also improved adoption because it was integrated into systems employees already use rather than requiring another standalone platform, she said.
Arthurs said labor management continues to be the issue most frequently raised by operators. Using AI to surface scheduling inefficiencies, contract labor costs and overtime opportunities can help managers make better daily decisions, he said. According to Arthurs, even small gains produce significant financial results.
"If you just save a minute per occupied room at a 300-room full-service hotel, that is translating to hundreds of thousands of dollars savings per year," he said.
Leadership Priority
As AI tools become more embedded throughout hotel operations, executives are increasingly focused on workforce education.
At Sage Hospitality Group, Schwartz said AI fluency has become a strategic priority across the organization. "We believe, as part of the budget process this year, that questions will come up," Schwartz said. "We're working very heavily on fluency."
The company has rolled out ChatGPT Enterprise and training programs across its leadership ranks to help operators understand the rapidly evolving technology landscape.
McNamara echoed that concern, saying workforce readiness has overtaken cybersecurity as the issue that keeps her up at night. "The thing that keeps me up at night these days is making sure that my associates are fluent in AI," she said. "I want to make sure that we're giving them the tools to be successful in this next era."
She added that employees using tools such as Copilot and Claude are already producing ideas and use cases that the company is scaling across the broader organization.
Fragmented Hotel Systems
Many operators remain overwhelmed by the number of disparate systems required to run a hotel, panelists said.
"The number one thing I hear is we have too many systems, and they don't talk to each other," McNamara said.
She pointed to revenue management as a workflow currently undergoing AI-driven improvement at Aimbridge. Revenue managers often oversee multiple properties across different brands, requiring them to access numerous platforms and data sources throughout the day.
The company is developing AI-powered forecasting and analytics tools designed to help revenue managers surface key insights while reducing manual work and repetitive tasks.
McNamara estimated AI could contribute roughly 300 basis points of margin improvement over the next five years if operators embrace change and execute effectively.
Others were even more bullish. Arthurs suggested achieving EBITDA margins of 30 percent is realistic through improved visibility and operational efficiency.
Energy management was also highlighted as a significant opportunity. Gilbert said connected buildings can reduce energy consumption by automatically adjusting HVAC systems based on occupancy while simultaneously improving maintenance and preventing equipment failures.
"The biggest waste of a hotel is conditioning empty air," he said, adding that occupancy-driven controls can significantly reduce energy usage while extending equipment life.
Reimagining Roles
Looking ahead, panelists predicted AI and automation will fundamentally change some hotel positions, though most emphasized that hospitality will remain a people-centric business.
Gilbert predicted hotels will increasingly deploy robots in engineering and back-of-house functions, handling preventive maintenance and routine operational tasks.
McNamara suggested the traditional front desk could disappear altogether, with administrative processes becoming highly automated. "I don't think the people go away," she said. "I think the people are phenomenally important to the guest experience, but I think the desk itself goes away."